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advanced that would justify the proposed change in that respect. A review of the testimony of the various veteran organizations and public interest groups who have devoted so much time and effort to this program will disclose the unified thinking that there should be a separate constituent agency created within the Housing and Home Finance Agency as a greater assurance that this program would receive the special consideration necessary for its success, rather than become submerged in the numerous other activities and responsibilities of the office of the Administrator.

The amendment contains a section providing preference to veterans in the rental of housing units constructed under this title, which has been spelled out in much the same manner as provided in the public housing bill enacted last year. We believe that if the provisions of this section are implemented with appropriate regulations and properly enforced, upward of 75 percent of the housing units constructed for rent under this title will go to veterans or their families and we, therefore, take particular pride in having had a part in its approval..

In conclusion, we would like to congratulate the chairman and members of the committee for their untiring efforts to develop a comprehensive and well balanced Government housing program by giving priority to this legislation. We urge the speedy approval by this committee of H. R. 6618, which will provide financial assistance to the middle-income third in acquiring housing accommodations at prices they can afford to pay.

The CHAIRMAN. Does that conclude your statement?
Mr. DINGER. Yes, sir.
Mr. Rains. I would like to ask a question, Mr. Chairman.
The CHAIRMAN. Mr. Rains.
Mr. Rains. You are Mr. Dinger!
Mr. DINGER. Yes, sir.

Mr. Rains. I note on your statement that you are the representative of the American Legion, is that correct?

Mr. DINGER. Yes, sir,

Mr. Rains. There is only one question I want to ask? Do you think that we and the American Legion can justify the variance in interest rates proposed in this set-up by Government Mortgage Corporation, between that and the interest rates given on veterans' loans ?

Mr. DINGER. I don't claim to be an expert on interest, but it has been the feeling of the American Legion that private industry has made no effort to get into a building program which would supply the need that this bill has in mind. We don't feel as though there would be any competition in interest rates because we don't feel as though private financing can accomplish the purposes which this bill proposes to accomplish. There has been quite a bit of discussion as to the competition between the 3-percent interest rate provided in this proposal-

Mr. Rains. If anything, I prefer seeing the interest rate come down on the GI bill as well, but the thing that troubles me is that a few years after the war and after we have made a good many loans to veterans under the program we held out to them at the best-should have been at any rate-we come along now to the middle-income group and in order to give them lower interest rates we set up a Government mortgage corporation. I am afraid my American Legion boys in Alabama and my colleagues in Congress generally are going to feel

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that we gave the veterans the butt end of a stick when we did not give them the same consideration on interest rates that we now propose for the middle income groups, so I am wondering, if I can find it, a way to justify support of the measure.

Mr. DINGER. Yes. I would like to say that I believe this is a little bit different problem than-I don't think it is comparable with the GI loan 4 percent figure financing. As you probably know in the bill that was passed by the house last year there were a number of provisions that would implement the GI home-loan program and those provisions were put into the form of legislation upon the recommendation of veterans' organizations and other groups who had discovered the need of improvement in the GI home-loan program.

I don't believe that this particular title of the over-all middle-income bill will in an way affect what we have done in the past through the GI loan-guarantee efforts or what we hope to be able to do in the future, but that this will provide housing for the middle-income families of the country and it includes veterans

Mr. RAINS. That is right.

Mr. DINGER. At monthly prices that private industry has not been able to compete with.

Mr. Rains. Do you think that the majority of the people who would like to use this legislation or this program for housing would be veterans ?

Mr. DINGER. Yes, I do. I believe that American Legion posts, and other veterans' organization posts, who already in most instances are incorporated under their State corporation laws, would be a natural place for a cooperative such as proposed in this bill to begin to form. I feel certain, especially in your larger metropolitan areas that the American Legion posts and other veterans' organization posts will grab at this opportunity to get into this program of making housing units available at prices that the average income veteran can afford to pay.

Mr. DEANE. Will you yield, Mr. Rains, for an observation ?
Mr. RAINS. For one question.

Mr. DEANE. Here are 40 FHA or GI houses, one to be serviced. Here is a cooperative of 40 units but all serviced by one mortgage.

Mr. Rains. Of course, that would naturally cut the interest rate, but the point that troubles me is, and I believe it is going to trouble our colleagues on the floor, is the statement: "Here you are offering a better proposition to middle-income groups than to veterans.” I am hearing it everywhere. If I could get into the record any better reasons I would like to have them. I realize it would be cheaper financing to make it in one large loan than to spread out the small units under FHA, but the simple fact remains that in order to get this low-interest rate, we are not offering it to private financing interests like we offer FHA. We are setting up a mortgage corporation. That is the only way we could get the 3 percent interest rate, no doubt.

You see my point. We did not do that any other place and I think that is going to be the bone of contention. It is the bone of contention with everyone with whom I talk. One other situation, which I would like to mention now : Certainly I am not going to take a provincial attitude. I would vote for it if it would help the metropolitan centers but we have a lot of people who are going to ask, “How is it

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going to help my State?” Do you think that this legislation has universal appeal or is it aimed strictly at the metropolitan centers of the country?

Mr. DINGER. I certainly think it does have a universal appeal. Any community that is large enough to organize a cooperative will be able to benefit considerably by this legislation. I do believe that the need for this

type of legislation is greater in the larger metropolitan areas. Mr. RAINS. That was true of public housing. Naturally, that is true.

Mr. DINGER. But in your smaller communities where there is a need, this bill is certainly equipped to be of assistance to those areas, just as favorably as it would to a large metropolitan area.

I think that the members of this committee will recall that in previous testimony the city of Baton Rouge, La., through the efforts of Nicholson Post of the American Legion entered into quite a large veterans' housing cooperative.

They ran into some difficulties because they didn't have the benefits that we are trying to make available through this legislation.

Mr. Rains. I happen to know, also, of cities like Atlanta, Birmingham, and cities of that kind who have expressed great interest, the American Legion posts have, in legislation of this type, but I was wondering if the smaller towns in the country have likewise expressed any interest in it?

Mr. DINGER. I can get you some information on that, Congressman. We have numerous inquiries from American Legion posts and from department housing committees and department adjutants as to what sort of Government assistance and guidance is available to them, if they do have a group that would like to organize and form a cooperative development.

Mr. Rains. Does your information with the American Legion show that there is still a great housing shortage and that there is a great need for this type of legislation to meet that housing shortage?

Mr. DINGER. Yes; it would. Especially in the lower middle-income group. The national housing committee of the American Legion has just for the purpose of discussing this problem among themselves, set an average salary of veterans at something around $17 a week. With very few exceptions is there any housing, either rental or purchase housing, being made available in this country that would allow that income veteran to acquire adequate housing, adequate, livable housing?

There are a lot of efforts being made to reach this objective but it is a slow process and we are beginning to realize that instead of actually reducing costs or reducing expenses, what we are actually doing is reducing quality, so that there is very definitely a need for the type of housing at prices which this bill proposed to make available,

Mr. Rains. Going back once more to my question of interest, I have heard a great many Members of Congress, who represent agricultural districts, say, “I can't see why I should vote for this bill, and give 3-percent interest rates to cooperatives which I know will be erected in cities and towns, when the farmers, veterans alike, must pay 4 percent for theirs under the bill which we passed last year”; so, you can see the point I am driving at and the difficulty I think we are

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going to encounter in presenting it. So, I would like, if you think

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consider whether or not it would be feasible either to pull down the interest rates on those that we have already put out or to pull this one up at least to a comparable status.

Mr. DINGER. I certainly would be glad to give that consideration. I think that we may be a little premature in our thinking or insistence that this is going to be a 3-percent interest rate loan.

Mr. RAINS. We may be; that is true.

Mr. DINGER. That hasn't been definitely established, and of course that will come out of a formula.

Mr. Rains. No one knows. It may be under and it is likely to be over.

Mr. DINGER. That is right.

The CHAIRMAN. Are not the veterans, probably, more interested in housing legislation than any other people because of the fact that the veterans were away and could make no provision for themselves during the hostilities. They came back and a few of them could make adequate provision for housing; and as a class are they not more interested than any other class of American people in adequate housing?

Mr. DINGER. I think they are, because when they returned from military service they found that all of the available apartments and housing units that were priced within their income limitations were already taken and they have had to look toward whatever substandard housing they can get instead or whatever new housing is being produced through Government assistance by private industry.

The CHAIRMAN. During the war they were not engaged in private enterprise. They were engaged in defending their country and, because of that reason, it seems to me that they are at this disadvantage yet, and because of that is it not true that the great number of veterans who are in the middle-income group will be the beneficiaries of this legislation?

Mr. DINGER. We estimate that approximately 67 percent of the veterans of World War II are within the middle-income group. By that, we mean over the eligibility figure for public housing and under the ability to purchase the private housing which is being constructed at the present time.

The CHAIRMAN. So, the veterans will not be prejudiced by this law if it accomplishes what it intends to do, but it will probably be the class most benefited by it; do you not think?

Mr. DINGER. I certainly do. I think it is the first great effort that has been made so far to bring housing costs within the veterans' ability

The CHAIRMAN. We cannot consider benefits by comparing them with the benefits that other people might receive. I think each one of these acts should stand on its own merits; and, if this bill is beneficial to the veteran, and it is to the benefit of middle-income groups, I think it should be considered independently of what we have done for other classes. Do you not think so?

Mr. DINGER. Yes, sir. I pointed out in my statement that insofar as the housing units constructed under this bill for rent, with the veterans' preference provision that has been written into this bill, with the exception of displaced persons from slum clearance in urban redevelopment priority, veterans are going to be given the next priority

to pay:

and, among those, disabled veterans first, very similar to the way it was spelled out in the public housing bill; so that I doubt in the large metropolitan areas, where the veterans are anxious to move into these rental units, there will be very many, if any, nonveterans, except those that are displaced from some slum clearance in the development project.

The CHAIRMAN. That is all.

Mr. MULTER. Mr. Dinger, having in mind that the 4-percent interest rate would increase the gross monthly rental charge for these units from $3.50 per month, depending on the cost of the unit, the $3.50 increase being on the $7,000 unit and about $4.02 on an $8,000 unit and $4.50 on a $9,000 unit, do you think that that would be a deterrent to veterans or others taking advantage of this bill, if the project is set up and required 4-percent interest rates rather than 3?

Mr. DINGER. I don't believe there is any need for it. I think we have to consider here whether it is necessary for this mixed-ownership corporation to make an additional 1-percent profit. That certainly isn't

Mr. MULTER. You don't get any profit whether the interest is going to be 3 percent instead of 4 percent. There will be no profit under this bill in any event. It will require payment of an additional sum per month per unit of $3 to $4.50, depending on the cost of the unit if the interest rate is 4 percent instead of 3 percent. Would that deter the veterans or others from taking advantage of this bill?

In other words, instead of going into a $7,000 unit at $59.81 as the gross rental charge, he would be required to pay $62.83. Do you think that that would keep him out?

Mr. DINGER. I think it certainly would interfere with the very objective of this proposal and that is to reduce monthly costs in every conceivable way possible.

Mr. MULTER. You know there is nothing in this bill, nor in the one that was reported out by the Senate committee, which says that the interest rate will be 3 percent?

Mr. DINGER. That is right. They suggest it will be 3 percent.

Mr. MULTER. The figures submitted to us by Mr. Foley show the charge on the basis of 3-percent interest, 314-percent interest, and 312percent interest. I have projected the figures on the basis of 4-percent interest. I am wondering whether in your opinion it is going to make any material difference in the number of persons who will take advantage of this bill if the rate had to be set up as 4 percent?

Mr. DINGER. I think it certainly would.

Mr. MULTER. I notice in your statement that you say the American Legion is in favor of S. 2246. You do not use the number, but you say “The bill as favorably reported by the Senate Banking and Currency Committee.” I assume you refer to Senate bill 2246.

Mr. DINGER. That is correct.

Mr. MULTER. The one reported out has the same provisions as H. R. 6618 that we have been considering here?

Mr. DINGER. No. That was amended by Senator Maybank. The original title III was amended. The Senate committee has been holding hearings on that amendment, and I think they are in executive session now in the process of reporting it out.

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